What does gross margin mean?

How much of every sales dollar is left after the direct cost of what was sold.

How do you interpret gross margin?

Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.

How does gross margin compare across companies?

Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.

Starbucks SBUX Gross margin

Discontinued — last reported Q2 '20

Gross margin at other companies

Keurig Dr PepperKDP

53.8%-1.5pp

Restaurant Brands InternationalQSR

65.3%+0.9pp

Casey's General StoresCASY

24.5%+1.2pp

PepsiCoPEP

54.1%-0.7pp

Costco WholesaleCOST

12.9%+0.1pp

General MillsGIS

33%-2.3pp

Other financials

Income statement

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Revenue$9.5B+8.8%

Operating income$828.1M+37.8%

Net income$510.9M+33.0%

EPS (diluted)$0.45+32.4%

Balance sheet

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Cash & equivalents$1.5B-42.7%

Total debt$24.4B-6.2%

Total equity-$8.5B-11.1%

Total assets$30.6B-3.4%

Cash flow

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Operating cash flow$364.5M+24.8%

CapEx$272.7M-53.7%

Free cash flow$91.8M—

Valuation

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Market cap$113.76B-8.4%

Enterprise value$136.62B-7.3%

P/E76.1×+36.4×

P/S3×-0.5×

Profitability

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Operating margin7.6%-4.9pp

Net margin3.9%-4.7pp

Returns & leverage

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Return on equity136.5%—

Debt / equity7.8×—

Current ratio0.9×+0.3×

Where this comes from

Calculated from Starbucks’s reported figures.

gross profit/total revenue=72.3%

Based on trailing twelve months.

The official record: Starbucks’s 10-Q, filed April 27, 2021, on SEC EDGAR. View the filing →

Questions, answered.

What does gross margin mean?: How much of every sales dollar is left after the direct cost of what was sold.
How do you interpret gross margin?: Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.
How does gross margin compare across companies?: Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.